Public expenditure saves from boredom – Gazeta Kommersant № 57 (7258) from 04.04.2022

The White House introduced in the State Duma a package of amendments to the laws on state procurement (FZ-44) and state companies (FZ-223), designed to support participants in the contract system in the face of sanctions and the accumulated problems of the Russian economy. Following the recent reform of the contract system, new amendments in the interests of individual customers and contractors have resulted in a large-scale wave of deregulation that affects all participants. We are talking about simplifying and speeding up procedures to stimulate demand, as well as the exclusion of information on procurement from public access to protect against secondary sanctions under the “Crimean” option. A large block of amendments simplifies construction procurement to accelerate capital construction.

The government has introduced a package of amendments to the State Duma to the procurement legislation – measures to support customers and suppliers against the background of sanctions. After the reform of the contract system within the “optimization” package of the Ministry of Finance, comparable to the “regulatory guillotine” for government procurement, a new package of amendments, which extended not only to FZ-44 but also to FZ-223, de facto fixes a new wave of deregulation. At the same time, one of the amendments to the bill removes procurement relations from the subject of regulation of the law “On mandatory requirements” (which may be introduced subject to strict restrictions) to maintain the possibility of new operational adjustments to procurement legislation.

The government package reduces the terms of contract payments for FZ-44 and FZ-223 to seven days after signing the acceptance certificate.

Currently, these deadlines are ten days for SMEs and 15 – for other government suppliers, state-owned companies must pay off small businesses in seven days, there are no restrictions for other contracts.

To expedite the start of procurement, public customers will be given the opportunity to justify the initial maximum contract price (NMCC) on the basis of publicly available price data, if no commercial offers have been received. Until the end of 2022, customers will also be able to waive the performance of the contract, warranty obligations in the procurement notice and the draft contract, except where the contract provides for the payment of an advance without treasury support. For example, security will be required for construction contracts with “increased” mandatory advances of up to 50% of the contract amount (larger advances are allowed only with treasury support).

The amendments also affect state and regional construction sites.

So, it is offered to “enlarge” purchases if turnkey construction is supposed. According to the bill, in the procurement of state companies (223-FZ) the customer will be able to identify not different contractors to perform different work on the preparation of design documentation and construction itself, but one who will be responsible for the whole complex of works, as already provided in public procurement -FZ). It should be noted that such an innovation closes the existing legal gap – the possibility of state-owned procurement of turnkey construction works is not regulated. Against this background, in 2020 the Federal Antimonopoly Service clarified that it did not consider it a violation to conduct such turnkey procurement by such customers, referring to the fact that the nature of construction procurement under 223-FZ and 44-FZ is identical.

Within the framework of such purchases, the inclusion in the contract of a “clause” on the supply of equipment is also allowed. According to the project, such a possibility is also allowed within the framework of a state order – now until 2024 the subject of one procurement can be only work on preparation of documentation, engineering research and construction or repair. In this case, the contract is required to record separately the cost of construction work and work on the supply of equipment. In addition, the purchase of a construction object under 44-FZ “turnkey” will be possible without its inclusion in the previously formed list of construction projects “turnkey”.

It is assumed that such changes will speed up the commissioning of capital construction projects – due to the fact that the customer will be able to make only one purchase without “bidding” several contracts. Apparently, the expectation is that the developers themselves, being limited in time, will be able to find subcontractors to perform certain “clauses” of the contract faster than another general contractor will be found in another tender.

The amendments also include measures to simplify procurement procedures and protect procurement participants from the spread of secondary sanctions.

Sanctioned state customers will be able to make closed purchases on the site for the state defense order, and the state joint-stock company – from April 2023 to post information about the purchase in the UIS without posting on its official website. Such a practice is already known – in 2017, due to sanctions, data on the procurement of Crimean companies were classified. The Ministry of Finance pointed out that this did not affect their transparency. Another counter-sanction measure is related to the tightening of liability of suppliers of sanctioned customers – in case of significant breaches of contract, they may be included in the register of unscrupulous suppliers after the unilateral refusal of customers from the contract. The Ministry of Finance also proposes not to use foreign currency for customers under 44-FZ when determining the NMCC, with the exception of customers operating in a foreign country. A similar initiative for FZ-223 is being prepared by the FAS. In theory, currency restrictions should minimize customers’ exchange rate risks, but experts and the market have already criticized this approach because of the transfer of risks to suppliers (see Kommersant, April 1).

Diana Galieva, Evgenia Kryuchkova


About the author


Leave a Comment